History

BlackRock was founded as BlackStone Financial Management within the private equity firm Blackstone Group in 1988. Larry Fink, BlackRock’s founder and CEO, had joined Blackstone in 1988 as a partner, along with Ralph Schlosstein, former White House aide under the Carter administration, and Robert Kapito and Sue Wagner. Before joining Blackstone, Fink was a managing director at First Boston, where he pioneered the mortgage-backed securities market in the United States. In 1992 Fink, Schlosstein and Co separated from the Blackstone Group under the name BlackRock and aggressively re-invented it as an independent asset-management company. In 1995, PNC Financial Services Group purchased BlackRock and in 1999, assets under management had grown to $165 billion and the firm decided to go public.1

Much of BlackRock’s recent growth has been through its acquisitions. On January 28, 2005, BlackRock purchased State Street Research Management, a mutual-fund business that had previously been owned by MetLife. This acquisition added a sizable equity business to BlackRock’s funds, which had previously comprised mostly fixed-income securities. On September 29, 2006, BlackRock completed its merger with Merrill Lynch Investment Managers (MLIM), halving PNC’s ownership and giving Merrill Lynch a 49.5-percent stake in the company. On October 1, 2007, BlackRock acquired the fund-of-funds business of Quellos Capital Management. On April 30, 2009, BlackRock hired 43 employees from R3 Capital Management, LLC and took control of the $1.5 billion fund.2

Headquartered in New York, BlackRock serves clients from offices in 24 countries, maintaining a major presence in North America, Europe, Asia-Pacific, and the Middle East. With approximately 8,400 employees, including more than 700 investment professionals worldwide.3

Role in 2008-2009 Bailout, Management of Maiden Lane Portfolios

BlackRock Financial Management Inc. was retained by the New York Fed to manage and eventually liquidate the assets held in newly formed Delaware limited liability companys (LLC) to fund the purchase of residential mortgage-backed securities (RMBS) from the securities lending portfolio of several regulated U.S. insurance subsidiaries of AIG, as well as Bear Stearns. These companies were formed in late 2008 under the names Maiden Lane LLC (which was incorporated with the purpose of facilitating “the merger of the Bear Stearns Companies, Inc. and JPMorgan Chase & Co.”), Maiden Lane II LLC and Maiden Lane III LLC (which were formed to fund the purchase of certain multi-sector collateralized debt obligations (CDOs) from certain counterparties of AIG Financial Products Corporation). In early 2009, the collective worth of these companies was more than $200 billion. According to Bloomberg, as of July 2009, BlackRock received at least $71 million in the first year of contracts to oversee assets previously owned by Bear Stearns Cos. and American International Group Inc. BlackRock is received $45.3 million that year for running the Maiden Lane holdings that the Federal Reserve took over from Bear Stearns, based on contract terms released by the New York Fed. The company earned another $25.5 million to manage the Maiden Lane II and Maiden Lane III investments that the Fed purchased from AIG.4

In the initial stages of the U.S. government’s bailout of the financial system, Maiden Lane III paid large sums of money to a number of other European banks, including some U.S. institutions already receiving money from the government. Though these transactions were ostensibly designed to pay debts on credit default swaps held by AIG Financial Products, Maiden Lane III ultimately served as a conduit to funnel large sums of taxpayer money to pay off private debts owed to foreign corporations. These “counterparties” to so-called “toxic assets” held by AIG were paid more than $27.1 billion through Maiden Lane III, including Deutsche Bank, Landesbank Baden-Wuerttemberg, Deutsche Zentral-Genossenschaftsbank, Dresdner Bank AG, Goldman Sachs, Société Générale, The Royal Bank of Scotland, Barclays, the Bank of Montreal, Rabobank, Calyon, Wachovia, and UBS, among others. These payments occurred from September 16-December 31, 2009.

Connections and Conflicts of Interest in Maiden Lane

BlackRock was originally the Financial Management portion of Peter G. Peterson and Stephen A. Schwarzman’s Blackstone Group. The Blackstone Group and BlackRock Financial Management both derive their name from their co-founders’ surnames; schwarz means “black” in German and Peter is derived from the Greek word πετρος meaning “stone”. Laurence Fink, who ran the Financial Management division of the Blackstone Group, was heavily involved with the initial creation of mortgage-backed securities, the same type of financial products that would later lead to the Global Financial Crisis of 2008-2009. 5

Peter G. Peterson, the cofounder of the Blackstone Group, is the Chairman Emeritus of the Council on Foreign Relations, as well as the former Chairman of the Federal Reserve Bank of New York prior to Timothy Geithner. 6 He is also the founder and chairman of the Peterson Institute for International Economics, a globalist think tank that is financially supported by David Rockefeller and Maurice Greenberg’s Starr Foundation. 7 C. Fred Bergsten, the Director of the Peterson Institute for International Economics, is a North American Steering Committee member of the Trilateral Commission; David Walker, President and CEO of the Peter G. Peterson Foundation in New York is also a Trilateral commission member.8 Both Peter G. Peterson9 and Timothy Geithner10 are former Trilateral Commission members. James Dimon, Timothy Geithner, and Stephen A. Schwarzman are all members of the Council on Foreign Relations. James Dimon is also a Class A director of the Federal Reserve Bank of New York. Mr. Schwarzman was a also member of the Skull and Bones society at Yale University.111213

Ownership

Merrill Lynch & Co., Inc., a wholly-owned subsidiary of Bank of America Corporation, The PNC Financial Services Group, Inc. and Barclays PLC own economic interests in BlackRock approximating 34.1%, 24.6% and 19.9%, respectively, with the remainder owned by institutional and individual investors, as well as BlackRock employees.